I have not been able to find any legit reports about a raid the of servers of Demonoid. No news of arrests either.
It appears that Torrentfreak posted some pure speculation about what happened, and why the site went down.
When a site goes down and there is a raid on servers, arrests made, then of course the news media gets the story. I am not finding any news stories of arrests, just rehash of Torrentfreak's release.
What appears to have happened is that a DDoS attack did occur, and then their ISP cancelled Demonoid's contract due to too much controversy and many legal inquiries.
This all points to (imo) a relaunch of the site from a new location at a later date. They said it would be a while to sort out the problems, and I believe finding and securing new server locations after a cleanup can take a couple of months.
There is simply too much of the story missing from legit news outlets for this to be a slam-dunk endgame. When Demonoid's head is served up on a stick, the real news will report it. And for now, this is about all the real news is reporting:
http://www.bbc.co.uk/news/technology-19194467